Avant-Garde Capitalism in France Author(s): J.-J. Ermenc Source: The French Review, Vol. 31, No. 2 (Dec.

, 1957), pp. 129-135 Published by: American Association of Teachers of French Stable URL: http://www.jstor.org/stable/383540 . Accessed: 08/11/2013 12:38
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Avant-Garde Capitalism in France

byJ.-J. Ermenc
OVER

A CENTURY AGOin Francethereexisteda variantof

capitalism which, in its treatment of labor, was far in advance of its timeperhaps a century. Its practitioners abandoned the amoral labor precepts of conventional conservative capitalism; the cardinal principles of laissez faire, laissez passer and self-determination or rugged individualism were considered pass6. They instituted health, welfare, and education plans for the improvement of the conditions of life in the factory and the community for the workingman and his family. The welfare plans frequently provided for "cradle to grave" security; through them financial aid to offset the misfortunes of illness, accident, premature death, unemployment, and old age was assured. These plans were usually administered by employees. Occasionally the employees acquired an equity in their company by investing their surplus funds in company stock. This was perhaps the first instance of "peoples' capitalism." It was not a major movement in French capitalism but it did include some private enterprises of first magnitude in the national and international industrial firmament. Avant-garde capitalism in France came to international attention at the Paris Universal Exposition of 1867. It came as a surprise to most industrial observers. Previous Expositions had been showcases for technological progress. The Paris Exposition of 1867 carried on this tradition but had an additional category for exhibitors to display, in some form, the social progress they had helped their employees make. As prizes were awarded for outstanding technological developments so a category of New Prizes was established by the imperial decree of Napoleon III for those "... who have succeeded in ameliorating the material, moral, or intellectual condition of the working population." Among the interesting exhibits of industrial town planning at the Exposition, the most impressive seemed to be that of the cite ouvriarelocated on the outskirts of Mulhouse in northeastern France. The project itself was begun in 1853 with the organization of a home loan corporation by twelve manufacturers of Mulhouse who supplied the capital. The corporation undertook to build homes for workingmen and to encourage them, with liberal financial terms, to buy the homes on the installment plan. A downpayment of about ten per cent of the purchase price was required and the balance was payable in the amount and frequency of rent
129

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over a thirteen-year period. By the end of the first year of the existence of the corporation, 384 homes were built and sold; by 1876 a total of 920 homes of varying style and plan, and including areas for gardening, had been sold for a total of 2,700,000 francs. The project included a public laundry, baths, a nursery school, and cooperative stores for food and clothing. In 1869 a manufacturer of Mulhouse contributed 100,000 francs for the construction and endowment of a workingman's club. The national government supplied funds for the construction of roads and public buildings. While Guizot's law of 1833 had established a system of public schools, attendance was not compulsory and few children attended. However, a resident of the cite ouviere at Mulhouse was required, as a condition of residence, to send his children to school until they became twelve. Beginning in 1866 further education, for those willing and able, was provided in a school for commercial training. Later reputable schools for instruction in chemistry and machine maintenance were established. These facilities for vocational education were initiated and supported by the capitalists of Mulhouse. The effect of the Mulhouse project in decreasing labor disputes and increasing industrial productivity was noted in 1867 by the authoritative British magazine Engineering; the cite ouvriere was described as ". . . a practical model of one of the greatest desiderata in the manufacturing districts of England." The friendly, cooperative feelings which existed between employee and employer, the poor and the wealthy, were contrasted with the class antagonisms which generally prevailed in England. It concluded with the hope that the example of Mulhouse would be heeded by British capitalists. There were other cites ouvrieres constructed later at Guebwiller, Beaucourt, Colmar, Marcq-en-Bareuil, Marseilles, and Paris but none achieved the fame of Mulhouse. The inspiration for the cites ouvrierescame from Louis Napoleon both as president and emperor. He encouraged financial and industrial leaders to form organizations a la Mulhouse to finance low cost, comfortable housing for workingmen. A fund of 16,000,000 francs was set aside to reimburse possible losses of the home loan corporations up to one-third of the cost of the project. Despite the gaucherie involved in a donor of a prize winning it, the judges of the Paris Exposition of 1867 awarded a grand New Prize to Napoleon III for being the stimulus in the development of the cites ouvrieresof France. There was an additional sour note to the award of this prize to the "socialist Emperor." It is to be found in an article, appearing in Harper's of April, 1872, which suggested that Napoleon won the New Prize because he had

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not permitted exhibits of the Social Palace at Guise to be displayed at the Exposition. The Social Palace, or Familistbre, at Guise was built in 1859 by M. Godin the owner of a factory which manufactured heating apparatus. It is said to have been suggested by Fourier's Phalanstery. The Familistbre is a variation upon the cite ouvriere.The principal buildings included three large four-story quadrangular buildings in which the employees, as well as M. Godin and his officials, lived with their families. The arrangement of rooms in each of the quadrangular units was unique. As a family expanded or contracted in its life cycle, rooms could be added or given up as required. This in modern "sociologese" would be called "flexible housing." A cafW, bakery, restaurant, and other cooperative stores for food, drink, and clothing were located on the first floors of the buildings. It was said that the fifteen hundred occupants of the Familistbre could perform all the chores of running a household without going from under cover. A modern city planner would recognize the Familistbre as the prototype of the "superblock." In addition to the housing units there were school houses, a hospital, a bath house, laundry, a large theater, a billiard room and other recreational facilities. Both boys and girls were required to attend school until the age of thirteen. (Contrary to prevailing European opinion it was not considered quixotic by the avant-garde capitalist to educate females.) The boys were then permitted to enter apprentice training at the shops across the river. Absences of children from school resulted in fines being imposed upon their parents. The theatre was used to stimulate a participating as well as a spectator interest in music and drama among the Familistere residents. A choral society promoted competition among groups of singers and an employees' orchestra was sponsored. Before 1859 Godin had reduced the length of the working day from fourteen to ten hours. He had also formed a mutual aid society for the employees to which the company and the employees paid fixed fees, each month. The society provided benefits for the sick, the disabled, the aged, and survivors. Godin induced the employees to assume the administrative responsibility of the society. The successful administration of it by the employees led Godin to turn over the administration of the Familistere to the society. The funds of the mutual aid society were built up by its participation in a profit sharing plan initiated by Godin. In 1880 it was invited to buy stock in the Godin enterprises which included a factory in Belgium. Eventually all

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stock in the company was owned by the mutual aid society and all members were given shares in the company. This may suggest the future development of "peoples' capitalism" in the United States. A pioneer in the development of profit-sharing as an incentive for workingmen to increase their work-effectiveness was M. Leclaire, a large-scale painting and decorating contractor of Paris. The success of Leclaire was noted by John Stuart Mill in his book Political Economy. He wrote of "... . the beneficent example set by M. Leclaire and followed by other employers of labor on a large scale in Paris." A statue of Leclaire stood in the Square des Epinettes, in Paris, until 1942. In 1830 Leclaire entered the painting and decorating business in Paris. Its labor force was described as ".... notoriously the most dilatory, intemperate, debauched, and intractable workmen to be found in Paris." Leclaire believed that if workingmen shared in the profits of an enterprise not only would they become more productive workers, but, having a vested interest in the company, would become less tolerant of shirking and waste by their fellow workers. This belief was verified by experience; profit sharing was profitable for both Leclaire and his employees. By 1870 the plan benefited over one thousand employees. (By the end of the nineteenth century there were over one hundred companies in France sharing profits with their employees.) In 1838 Leclaire had helped a group of his best workingmen form a mutual aid society. By 1860 the society had accumulated sizable capital and was invited to invest it in the Maison Leclaire. As the sole perpetual partner it became, in effect, the owner of this profitable enterprise. The welfare accomplishments of two of the largest coal mine companies in France are notable. At Anzin, near Valenciennes, and Blanzy in Sa6ne-etLoire, beginning in 1834, excellent homes with land about them for gardens were provided for the miners at rentals amounting to five per cent of their wages. For those who wished to buy their homes, loans were offered by the companies with no interest charges. Schools were established and maintained by the companies. At Blanzy there were 6,300 children in company schools taught by 118 instructors. There were mutual aid societies to which both employee and employer contributed. The funds maintained medical, hospital, and nursery service and provided for old age and survivor benefits. At Anzin where 15,000 men were employed, there were on pension in 1867, 356 men, 455 widows, and financial assistance was given to 218 orphans. At Blanzy pensions were offered after thirty years of service and after the age of fifty five. The pensions at Blanzy were as high as 900 francs per year; this was close to the income of the average workingman in France. The recreational organizations encouraged and subsidized at both Anzin

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and Blanzy included a gun club, an archery club, gymnastic and fencing clubs, and brass bands. During the winter, the company sponsored lectures on history, economics, and cultural subjects. By the end of the nineteenth century the cost of welfare programs to the companies at Blanzy and Anzin was roughly equal to one-half the dividends paid to their stockholders. The welfare programs of these companies greatly influenced the social security laws of France which were drafted later for the entire coal mining industry. - In the field of heavy industry the outstanding example of avant-garde capitalism is the vast mining, metallurgical, and manufacturing establishment of the Schneider Company at Le Creusot in the purple grape country of Burgundy. This company was of particular interest to English engineers since it was providing formidable competition to the British steel interests for foreign markets. It was puzzling to many observers that this could be so, for by 1860, Le Creusot, in expanding to Brobdingnagian proportions, had outgrown its local natural resources and was importing iron ore from Algeria and coal from southern France. It had also established a comprehensive health, welfare, and education program affecting 25,000 employees. Despite the fact that the costs of production at Le Creusot included the burdens of extra transportation costs and "fringe benefits," the profits at Le Creusot as reported each year in the English press remained approximately at ten per cent over the years. The mainspring of the labor policy at Le Creusot was its educational system. It was begun in 1841 with a total enrollment in company schools of one hundred sons and daughters of employees. By 1867 the enrollment reached a peak of four thousand and well over one hundred teachers. Attendance at the company schools had several important inducements. One was the company rule that no one could have a job in the company, at any level, unless he could read and write and was over the age of fourteen. Another stimulus was the prospect of "social mobility" via education. It was possible for the children of employees, who were willing and able, to become educated, at company expense, for management positions and so rise above their fathers' status in society. In 1867 about one hundred promising boys from the company primary schools were sent from Le Creusot for five years of secondary school education. During this time the group was winnowed to about ten boys who were prepared for the competitive admission examinations to the government engineering schools. By 1872 secondary education was being provided at Le Creusot. For those who became the chaff in the winnowing process, there were jobs available in the white-collar category as draftsmen and designers. Courses for adults were also offered. In 1867 about five hundred working-

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men took special courses for the upgrading of their skills. The classes were taught by graduate engineers who had received their preparatory education in the company school system. The advantage of the educational plan at Le Creusot to the industrial operation was derived from its creation of an intelligent and adaptable labor force which could quickly master the new technologies which were making existing industrial methods obsolete at a quickening pace. It was a labor force from which new ideas also could be expected. Engineering in 1867 suggested editorially that the French were outstripping the British not only in taste and delicate manipulation but also in solid workmanship and skill. It regularly reported the news of developments at Le Creusot and inspection trips to it became de rigueur for the industrially informed. An eminent American engineer and educator, Professor Robert Thurston visited Le Creusot in 1873. He wrote of it: ".... the organization and administration were simply admirable.. . the personnel consisted of a larger percentage of well informed and well educated officials than we had met in any similar establishment in Europe." The improvement of the material conditions of life for the Le Creusot employee was accomplished largely through "fringe benefits." They included: 1) Subsidized social activities; 2) Allowances for the families of men on military leaves; 3) Allowances for large families; 4) Loans for the purchase of company built homes on reasonable terms (between 1862-65, five hundred employees bought six-room homes with gardens); 5) Architectural service for those interested in building their own homes; 6) A Provident Fund started in 1838 for financial help to sick and injured workmen as well as for annuities to widows and orphans; 7) A free hospital of 130 beds supplemented by a corps of nursing sisters who attended patients in their homes; 8) A free maternity hospital; 9) Old age pensions; 10) A home for the aged. While the liberals expected that the workingman would respond favorably to a better environment the results were still surprising. Between 1841 and 1866 only nine felonies were reported. The Mining Journal wrote in 1869, ".... woman beating, which disgraces English working communities is, it may be said, entirely unknown [at Le Creusot]... Drunkenness, that curse of our country [United States] is very rarely seen at Le Creusot." Le Creusot continues today as it did almost a century ago. During the communist "show of strength" strikes in France in 1950, Le Creusot was in continuous operation. There were many other incursions of avant-garde capitalism into the French economy. It was the period of the Second Empire that marked the flowering of this genus. This brand of capitalism is the prototype of con-

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temporary liberal capitalism in the United States. But unlike its avatar it was achieved without threats, violence, or legal sanctions. What then, indeed were the pressures which brought it into being? One might infer that it was inspired by the appalling social conditions industrialization seemed to be creating. And one could not doubt that the influence of such men as Sismondi, Fourier, Proudhon, and Louis Blanc increased the sensitivity of the reflective capitalist to these conditions. But such factors would have to be considered as impulses only--effective to start movement in a direction to relieve the pressure. The persistence of avant-garde capitalism required more than humanitarian impulses. A more complete explanation for its development is to be found in the industrial environment of the nineteenth century. It was a period of social unrest, of swift technological change, and of expanding industry. The technological revolution made obsolescence an imminent industrial risk. An owner of a factory had to be able to change quickly from old techniques and machines to the new. These factors, in the estimation of the French avantgarde capitalist required greater numbers of satisfied, willing, and educated workingmen. Their paternalistic programs were directed toward this end. In the final reckoning the persistence of avant-garde capitalism was due to the fact that it was financially profitable. Its exponents also demonstrated that in the era of predatory capitalism, enlightened labor policies were possible. It is unfortunate that they were not as vigorous preachers of their cause as those who believed that capitalism was inherently evil. COLLEGE DARTMOUTH

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